25 years of reforms: Dramatic change of the Indian workplace post liberalisation

Today, about 33,000 youngsters get ready for job interviews everyday in different parts of India. Many have the choice of multiple industries and multiple employers.Rica Bhattacharyya&Brinda Sarkar | ET Bureau | July 21, 2016, 07:52 IST

Today, about 33,000 youngsters get ready for job interviews everyday in different parts of India. Many have the choice of multiple industries and multiple employers.More than 25 years ago, in a long dingy corridor of a public sector company, a hundred graduates would have queued up since morning, waiting to be ushered into the interview cabin. The fatigue on their faces reflected the tired state of the economy. That story would repeat in corridors across the country where employer was king.

Today, about 33,000 youngsters get ready for job interviews everyday in different parts of India. Many have the choice of multiple industries and multiple employers.

Liberalisation has been the wind beneath the wings for this massive formal job creation in BFSI, telecom, IT, ITeS, hospitality, retail, aviation, FMCG and healthcare. The Indian private sector emerged as the aspirational employer from a time before liberalisation when the best talent would go to PSUs, a handful of MNCs, or the IAS and other civil services.

Post liberalisation, power has shifted from the employer, who for the first time started selling jobs, to the employee, who now has a choice. It led to a real play of meritocracy and new professionally managed Indian companies started adopting global best practices.

“Liberalisation created jobs for the educated middle class. States with good education benefited the most — the southern states and Maharashtra. These states witnessed a greater number of jobs and greater compensation,” says TV Mohandas Pai, chairman, Manipal Global Education. Uttar Pradesh, Bihar, Madhya Pradesh and the Northeast got left behind.

Rituparna Chakraborty, cofounder, TeamLease Services, says the focus of job creation shifted from agri and manufacturing to services. “There has been growth in terms of market opportunities and a simultaneous supply of talent to fuel the growth,” says Moorthy K Uppaluri, CEO, Randstad India.

“Liberalisation has unleashed a lot of energy within the system. It has given a free rein to do things on merit,” says Harsh Mariwala, chairman, Marico.

Capital was no longer a constraint for companies, with FDI coming to India, and this led to the emergence of homegrown private-sector companies that were professionally run: Infosys, Wipro, Patni, ICICI, HDFC.

The technology industry underwent a paradigm shift in 1991, with many companies setting up captive centres in India. Companies like Infosys and Wipro showcased the possibilities and deliverables of Indian tech talent to the world. All these factors drove growth and created jobs. Of the 42.5 lakh people employed in IT, 33 lakh are in Hyderabad, Chennai and Bengaluru.

“I believe the sector will continue to grow. The work itself might change, as we are moving towards a focus on internet of things, artificial intelligence and machine-to-machine learning,” says Mahesh Nayak, COO, SAP Labs India.

Another sector that has seen tremendous growth is the shared services sector. This has been due to a number of factors. First, policy changes allowed for offshoring of business and tech processes to India. Second, India was poised to take on this challenge, with the right talent in place.

The offshore development centres gave companies abroad the cost arbitrage they were looking for. The telecom revolution made data travel easier and fuelled further growth.

Liberalisation also meant that the financial services sector underwent a transformation, with the expansion of private banking, offshoring of services and liberalisation in insurance. “A higher level of awareness about finances, rise in income of the middle class, and penetration of financial services in Tier 2 and 3 cities have also contributed to this growth,” says Kamal Karanth, MD, Kelly Services & KellyOCG.

Workers in the services industry today earn 10 times what those in agriculture earn, a divide that was about 3-4 times in 1991. However, labour-intensive sectors like manufacturing, engineering and construction have been left behind.

Archaic labour laws and lack of imagination and foresight around land and basic infrastructure “delaboured” these sectors. “To meet the needs of 12 million youth joining the workforce every year, we need manufacturing to take the lead in formal job creation. Sooner than later, customer aspiration shall lead to adoption of digitalisation and automation in services,” says Chakraborty. Which doesn’t mean less jobs on the table, but more skilled ones.

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